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Thai Government Appoints New Finance Minister to Boost Investor Confidence


Thailand's military-installed government has appointed a former World Bank economist to the post of finance minister in a partial cabinet reshuffle. Ron Corben reports from Bangkok that the appointment, aimed at boosting international confidence in the Thai economy, is being welcomed by financial analysts.

The most important cabinet appointment Wednesday was that of Chalongphob Sussangkarn as the new Thai finance minister.

Chalongphob, 57, is currently president of a private economic research institute. He is a former World Bank economist, and was a member of the Thai central bank's monetary policy board from 2000 to 2001.

He replaces Pridiyathorn Devakula, whose brief tenure was marked by policy changes that unsettled investors and reduced international confidence in Thailand's military junta.

Arporn Chewakrengkai, chief economist at the Thai Government Pension Fund, says Chalongphob is well regarded within the business community, and his appointment will help rebuild confidence in the economy.

"I think it should be positive for the government. He is one of the most respectable economists in Thailand," she said. "That is the first thing that might help gain some confidence. At least I believe in terms of policy direction, we will move toward the market mechanism."

Confidence in the country and its leadership has been rocked by several events since the military staged a coup in September and kicked Prime Minister Thaksin Shinawatra out of office.

In December the Bank of Thailand imposed controls on capital investments in a bid to keep the Thai unit of currency, the baht, from strengthening too much. The move led the stock market to plunge 15 percent in one day.

The Government then tightened rules that allowed foreigners to control Thai companies through the use of what are known as nominee shareholders. That called into question the basis on which several large international companies are operating in Thailand.

Confidence was also hit by explosions in Bangkok on New Year's Eve that left three dead and dozens wounded. The police have yet to determine who was behind the bombings.

Thepchai Yong, a senior editor with the Nationmedia Group, says stronger leadership by interim Prime Minister Surayud Chulanont is the key to regaining public confidence.

"The lackluster performance of the government is largely due to the lack of leadership on the part of the prime minister," he said. "I believe that the confidence in the government and the prime minister has been eroding, and he has to make a very serious change in the way he wants things in order to continue be in power."

The Thai economy, the second largest in Southeast Asia, has been slowing since the military takeover.

Foreign investors say they are focused on when parliamentary elections will be held under a new constitution now being drafted. The military junta originally promised elections by October.

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